Most companies purchase general liability insurance to protect themselves from potential lawsuits or claims resulting from accidents, injuries or negligence. They purchase professional liability insurance to protect themselves against the cost of errors, malpractice or negligence in services provided to their customers. Likewise, many companies are required by states to buy workers’ compensation insurance to ensure they can cover an injured employee’s medical expenses and loss of income.
So, why don’t more companies purchase cyber insurance to protect themselves against first- and third-party claims arising from cyber incidents?
Alarmingly, 43 percent of cyber attacks target small businesses, with 60 percent of these sized companies going out of business within six months of experiencing a cyber attack.
In today’s hyper-connected digital world, in which a lost or stolen laptop, a weak password, or a cleverly crafted phishing email scam can result in a massive data breach, does a lack of cyber insurance constitute good business sense? In a word, no.
Here are six reasons why cyber insurance is most likely a sound business investment for your company:
Data breaches are costly: The average consolidated cost of a data breach in 2016 was $4 million. That’s not pocket change. Considering a policy to protect your bottom line is key. A solid cyber policy is way more cost effective than a security breach. Not to mention that you can’t put a price tag on peace of mind.
Cyber incidents happen. More often that you think.These types of attacks don’t just happen to big corporations. In fact, nearly two-thirds of small/medium sized companies have been the victim of a cyber incident.
Coverage Works: Numbers don’t lie. Almost nine in 10 small/medium sized companies say that their cyber insurance covered the cybersecurity incidents they suffered. Don’t be a statistic – in a bad way.
Cyber Insurance Customers Are Happy Customers: Companies with cyber insurance are pleased with their policies, with 87 percent of organizations reporting that their policy performed as expected.
Uninsured Companies Falsely Believe They Are Well-Protected
The number one reason for not purchasing a policy is the belief that in-house security people and processes provide all the needed protection. Yet cyber incidents are a fundamental fact of life – it’s not a question of if a data breach will happen but when. Companies that think they are not vulnerable ignore the fact that data breaches do occur, both by accident and by design. Even the late Steve Jobs was the victim of a phishing attack. ‘Nough said.
It’s risk management, plain and simple.
Many companies that don’t have a policy and suffer an attack may never recover financially. Cyber insurance provides much-needed protection in the event of a cyber incident.
The bottom line? Companies that purchase cyber insurance do so because they understand the reputational impact and the potential for significant costs that come with a breach. The consequences of a loss of confidential data or the loss of income due to a system outage can be devastating. Cyber insurance helps protect your business from these risks. Not having its protection – or access to the expert breach response services that help you navigate the minefield of issues that follow a breach – will put you at a significant disadvantage.
Did you know that you can get a cyber policy for as little as $200 a month? Our experts at Roper Insurance can help protect your business with a comprehensive policy that meets your company’s needs. Give us a call today at 303-721-1145.